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(Image from Createjobsforusa.org)

Is America's problem a lack of credit? A Starbucks employee and an economist don't think so

This month Starbucks launched its Create Jobs for USA initiative, the coffee chain’s official response to America’s unemployment crisis. In a press release, CEO Howard Schultz says the program gives customers the chance to “take meaningful action to help create and sustain American jobs.” "We hope this a galvanizing moment as Americans come together to be catalysts for change,” Schultz continues.

The program will no doubt boost Starbucks’ image—and the density of red white and blue wristbands across America. But jobs? Not so much.

Starbucks’ plan to tackle the nation's massive jobs crisis is for you to donate money to a loan fund for “community businesses.” The fund, managed by a nonprofit called the Opportunity Finance Network, will make loans to small businesses, nonprofits and commercial real estate companies with the hope that the extra credit will free them up to hire more people. Starbucks is chipping in $5 million to "seed the project," not quite one two-thousandth of its record-setting revenue from the past year.

The rest is up to you—though a $5 donation earns you that tri-color wristband. And, in the words of Starbucks’ promotional pamphlet, “when you wear it you are stating that you have done your part, a big part, to help get this country back on its feet.” Starbucks employees are especially encouraged to donate – though an wristband will cost them most of an hour’s pay. “Nice work America,” adds the pamphlet, “getting ourselves back to work again and again.” (A Starbucks spokesperson declined to comment for this article.)

But don’t expect to see economist Dean Baker sporting Starbucks’ flag-colored “Indivisible” wristband. Baker isn’t buying what Starbucks is selling, starting with its diagnosis of the jobs problem: Starbucks’ literature pins U.S. unemployment on a lack of financing for small businesses.

“I just don’t think there’s any evidence to support that,” retorts Baker, the co-director of the Center for Economic and Policy Research. If the problem were really a lack of credit for small businesses, he observes, larger companies would be competing to get into the market, and a huge company like Starbucks itself “should be expanding like crazy.” Instead, “none of the things you would expect to see if it were the case that businesses were credit-constrained seem to be happening.”

Starbucks attributes its focus on credit to a survey in which “community businesses” said they need more financing. But “to get a good survey,” responds Baker, “you have to put it in the context of alternatives.” He says Starbucks’ survey results sound equivalent to, “Do you want an ice cream cone? Sure.”

Baker puts more stock in the National Federation of Independent Business’ annual survey of the biggest obstacles facing its membership. “Overwhelmingly, they say lack of demand. So the idea that this is a major factor impeding businesses is just bizarre.” If Starbucks was serious about creating jobs and setting a good example, observes Baker, it would declare a policy of neutrality toward union organizing in its stores. (The company says it plans "to add 200 new stores and remodel more than 1,700 stores in the United States" during the next fiscal year, which "may create approximately 2,000 full and part-time jobs across the country.")

But rather than a neutral stance toward unions, says Starbucks employee Erik Forman, Starbucks “fired many organizers, and they’ve waged a pretty relentless campaign against the union.” Forman was fired from his Minneapolis store in 2008 just before he and co-workers planned to go public with their union campaign.

The National Labor Relations Board, though notoriously wary of reversing terminations, found his firing to be an anti-union tactic and ordered Starbucks to return him to work. “They were pretty sloppy about how they fired me,” says Forman, because they “think they can do whatever they want.” Forman has been a union activist since soon after he began working at the Mall of America Starbucks in 2006. “It was pretty clear that nothing was going to change unless we worked together,” says Forman. His union, the Starbucks Workers Union, is an Industrial Workers of the World (IWW) affiliate, and is organizing at Starbucks stores around the country without seeking legal recognition or collective bargaining.

“We’ve been really frustrated seeing how the company has basically turned high unemployment into a PR opportunity,” says Forman. Echoing Baker, he suggests that a company that truly put job creation first would allow employees to organize freely rather than terrorizing them. Foreman says he and his co-workers work erratic and insufficient hours for just above minimum wage. "You’re running around like a chicken with its head cut off, trying to make all these drinks, because the stores are understaffed. So you go home at the end of the day exhausted, and you still can’t pay your bills.”

If Starbucks employees had a stronger voice at work, they could force the company to staff its coffee shops more responsibly, creating far more jobs than wristband sales likely can.
Making Starbucks a sustainable full-time job would free up some of those second and third jobs for other people. Paying “partners” a living wage, rather than inviting them to donate to real-estate companies, would address what actually ails U.S. job creation: a lack of spending by the non-wealthy majority.

“It’s absolutely disgusting that a company which rakes in $1.7 billion in profit is asking hard-working people to rake over their money to give to business owners to create jobs,” Forman says.

See why we’re re-inventing the In These Times magazine, and how you can be part of it.

Josh Eidelson is a freelance writer and a contributor at In These Times, The American Prospect, Dissent, and Alternet. After receiving his MA in Political Science, he worked as a union organizer for five years. His website is http://www.josheidelson.com.
Twitter: @josheidelson
E-mail: "jeidelson" at "gmail" dot com.

What if pumping gas were a job again, what if recycling fluorescent light bulbs and smoke detectors had a deposit like bottles, what if all robo calls had to be done by a human being? Wouldn't that create jobs? How many computer programers are we really going to need?

Posted by Rocco Liuzzi on 2013-10-18 22:00:05

This plan looks very well on paper, unblocking more money through this scheme will most definitely have a positive impact on businesses and thus employment rates but I have a lot of reasons to be skeptical about the success of this plan though... People should just be informed about their options when they are searching for a job. Many of them don't know that they could actually get peo services support for that. There are so many issues that need to be clarified to improve the current employment situation.
Posted by allie sandors on 2012-02-27 10:21:26

"LET THEM EAT CAKE" (with their coffee!)
All of us know that creating supply always increases demand, even if nobody has the money to create that demand.
(Just another BS publicity stunt and photo opportunity by another greedy company in the guise of "creating jobs!") I just can't wait to run out to Starbucks and pay 8 bucks, more or less, for a cup of coffee in which Starbucks has invested a couple of cents, and then donate another five bucks so Starbucks can look good and herd the sheep into their stores so they can make more profit.
Nothing selfish goin' down here folks, move along, Starbucks is only doing this outta the goodness of their collective hearts! I'm sure that a thousand new businesses (points of light?) will spring up overnight, with demand being so high, and people being so heavily infused with all the extra cash they've copped from the Bush tax cuts that created more jobs to accompany all those jobs we're seeing now......and if we're real real good, we can expect to be deluged with trickle down! Ah yes, to be trickled upon by billionaires is every Americans fondest wish!
I'm excited...I'm motivated, i'm almost giddy like a little school girl and I just can't wait to loan five bucks to a "small business" so they can create demand because that's how supply side voodoo works. We've seen IT all before and how totally suck-cess-ful it is.....
I think I'm feeling a "trickle!"
Hallelujah! Posted by mondomike on 2011-12-08 03:31:19

Interesting concept but everyone I think already knows what is happening and it seems that it is getting worse unfortunately. ...and on this positive note I just wanted to say thanks for the post and the blog. A lot of useful information that is worth sharing in my promotional gifts blog that I will be starting out in the next year. AnnePosted by Anne Marie on 2011-11-26 14:13:26

Nice story. I wrote one on this campaign as well, and my favorite reader's comment was, "well you can give $5 to the "campaign" or you can give $5 and your business to a small coffee shop instead." Well said. http://teenytinyhuge.com/2011/11/02/starbucks-launches-create-jobs-for-usa/Posted by jenn lindeman on 2011-11-25 00:29:30

I used to work for this company...and I was REALLY excited to join the team...I used to love the Brand and all the MESSAGES and the general FEELING of a Starbucks...but I quickly learned that EVERY last BIT of its Communications Materials are BULLSHIT!
They create a workplace which is HORRIBLE to work in...where every last policy makes the workers MISERABLE, while they are FORCED to smile at the Customers! All the Environmental, Farmer-Friendly, Recycling messages you hear from Starbucks are CRAP! Any attempts made at EFFICIENCY are quickly rebuffed and workers are REDIRECTED to "THE MANUAL"...they want MONKEYS, not Managers! Partly because upper management has only ever read ANY form of Management education JUST for the BUZZWORDS...ugh! If I hear the word SYNERGY again...
As a way to enhance their already SICKENING profit, they not only ENCOURAGE, but DEMAND the excessive DAILY waste of food, packaging and worker dignity. Everything that company does is a SHAM...things are presented on the sales floor JUST TO SEE if the SUCKERS will buy it...and they DO! Oh, the Holiday JUNK I used to sell...
If you are still paying $8 for a cup of coffee...it better be part of your Room Service bill in an overpriced Hotel...NOT in a Starbucks!Posted by Lester John Bates III on 2011-11-22 12:20:07

Last week I went into Starbucks with my mom who upon seeing she could help people get back to work for five dollars instantly acquiesced. I, on the other hand, was a bit more apprehensive. I wanted to know where exactly my five dollars was going and vowed to look into this. This is where it gets interesting.
I went online and learned that Starbucks was partnered with OPN for its Create Jobs USA campaign. OPN is an acronym for Opportunity Finance Network which according to their website is a national network of community development finance institutions investing in opportunity that benefits low income, low wealth, and other disadvantaged communities across America. Okay that didn’t sound to bad but how was this creating American jobs and I was a little weary upon hearing the word finance institutions- all I have to do is look around the country to see the handy work of some financial institutions. And some of OPN partners include Goldman Sachs, Wells Fargo, and HSBC. I thought there must be more to this! And, of course there is. Most members loan money, they are not giving grants.. There is also a new market tax credit of 39 percent over 7 years. A 39 percent tax credit, are you kidding me? It’s only on their initial investment. Can my mother qualify? After all she did give the money to Starbucks. Of course she doesn’t qualify. She couldn’t even get a donation receipt for her purchase.
To be fair, I did learn that Starbucks is not giving loans. They are giving grants. According to the OPN Starbucks partner page, grants must be used to lend to community businesses that create and retain jobs. They are giving grants to organizations that loan money? Is Starbucks also getting a new market tax credit of 39 percent? I think what I would appreciate most is clarity and transparency. Starbucks can you clear this up for us? Perhaps a note on the package of the bracelets you are selling letting us know where the money is going and how you are creating American jobs! And, are you getting a new market credit? If so, is that being reinvested because I know my mother who paid five dollars for the bracelet would say, “It better be!”
Educated People Know Knowledge Is Power
NYCEducationMomPosted by NYC Education Mom on 2011-11-22 11:32:37

How about being positive. Other massive corporations haven't donated any money. At least their doing something. How much have In These Times donated? It people like Josh Eidleson and other variables that keep this country from moving forward. Did u know Josh that for every bracelet Starbucks sells they donate another $30,000. Talk to me when you actually start doing something instead of writing negative pointless articles.Posted by Russell Malone on 2011-11-22 11:23:14

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